When collateral is held to secure a bond, who may use it?

• A. No one; collateral must be safeguarded and not used—held in a fiduciary capacity.
• B. The defendant may use the collateral as needed.
• C. The court may seize collateral for court costs.
• D. The insurer may use collateral to satisfy other obligations.

Answer: (C)

Collateral acts as security that the defendant or the surety must forfeit if bond conditions aren’t met. Its purpose is to ensure the court can recover costs if the bond is forfeited. When a defendant fails to appear or violates the bond, the court has the authority to apply the collateral to cover court costs arising from the case. The collateral isn’t intended for the defendant’s personal use, and it isn’t automatically available to the insurer for other obligations. If the defendant complies and the case resolves, the collateral is typically returned. If something goes wrong, the court’s ability to seize collateral to pay court costs is the mechanism that makes sense within bond security.